Last week, a significant piece of legislation was passed in both the House and Senate that governs U.S. trade with the Sub-Saharan African region. However, it received minimal media attention, especially when compared to news within the past year emphasizing trade with Latin American countries and Asian countries such as China and India. This brief post highlights the important U.S. legislation that governs U.S. trade with countries throughout Sub-Saharan African.
On August 2, both the House and Senate each passed a bill (see H.R. 5986 and S. 3326) that would extend the Third Country Fabric Provision of the African Growth and Opportunities Act (AGOA). The Third Country Fabric Provision was set to expire on September 30 of this year.
AGOA allows eligible African countries to export goods to the United States without paying duties on those exports. The Third Country Fabric Provision guarantees duty-free access to apparel produced in Sub-Saharan African countries and exported to the United States. The apparel can consist of textiles produced in other regions.
AGOA and its Third Country Fabric Provision have been instrumental in providing U.S. retailers an additional source of less expensive garments. Furthermore, eligible African countries, particularly the apparel industry in some of these countries, have benefitted economically from preferential access to the U.S. market.
AGOA was passed in 2000 and has to be renewed every five years. The Third Country Fabric provision within AGOA has to be reauthorized every three years. In 2015, Congress will have to vote on whether or not to extend AGOA and its Third Country Fabric Provision.
The next question that International Trade Examiner will explore is: Is the African market important for U.S. businesses? (Take our poll below to let us know what you think.)